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Investment Monitor 2022: Critical Minerals: How Prominent is Asia Pacific Foreign Direct Investment in Canada’s Critical Minerals Sector?

The Asia Pacific Foundation of Canada is excited to present its third and final Investment Monitor Report of 2022, which is focused on two-way investment between Canada and Asia in the critical minerals sector: Investment Monitor 2022: Critical Minerals: How Prominent is Asia Pacific Foreign Direct Investment in Canada’s Critical Minerals Sector?

The global shift towards renewable energy and clean technology has increased demand for certain minerals, referred to as “critical minerals,” triggering a global race to acquire a reliable supply of these natural substances used in everything from advanced batteries and solar panels to consumer electronics and wind turbines. As the demand for critical minerals grows, policymakers, businesses, and civil society actors will benefit from detailed information on investment trends in this sector. Investment Monitor 2022: Critical Minerals does just that, providing a comprehensive analysis of trends in foreign direct investment (FDI) over the past 19 years to better contextualize the role of FDI in the critical minerals sector.

Canada and Asia hold significant reserves of critical minerals and are among the leading global producers of nickel, lithium, and rare earths. Despite the presence of significant mining resources in Canada and the Asia Pacific, this Investment Monitor report finds that critical minerals made up only six per cent of the total FDI flow between Canada and Asia from 2003 to 2021. As global demand for critical minerals continues to grow, we expect that FDI in critical minerals between Canada and the Asia Pacific will continue to expand. But as the race for reliable supplies quickens, investment decisions on both sides of the Pacific will need to take into account the shifting policies and strategies – including targeted critical minerals strategies – of countries that host these increasingly valuable resources.

The Government of Canada released The Canadian Critical Minerals Strategy in December 2022 to boost the supply of “responsibly sourced critical minerals.” The Strategy aims to develop Canada’s critical minerals sector in a manner that respects Indigenous rights and ensures environmental sustainability. Domestic and international businesses will benefit from the government’s budgetary commitments, announced in the Federal Budget 2021 and the Federal Budget 2022, that will support research and development in the mining sector, the development of new critical mineral projects, and the development of new infrastructure. The Strategy will ultimately affect domestic and international investors interested in exploring critical minerals in Canada. Illustratively, several companies, such as Vale, Ford, and GM Canada, have announced investment plans across Canada’s battery value chain.

Investment Monitor 2022: Critical Minerals outlines key trends in inward and outward critical minerals investment between Canada and Asia, analyzes the impact of investment by state-owned enterprises, and reviews key policies that may encourage or deter critical minerals FDI in the future. The report provides FDI data at national and sub-national levels, outlines recent and historical trends, and explores investments by critical mineral type.

The report relies on the Investment Monitor database, which provides national, provincial, and city-level information on Canada-Asia Pacific investment flows. A subset of the database is publicly available on the Investment Monitor website, investmentmonitor.ca

APF Canada’s Investment Monitor reports and Investment Monitor data are designed to inform policymakers, businesses, and the broader public about FDI relations between Canada and the Asia Pacific. By compiling and analyzing FDI data, the Foundation facilitates the analysis of past FDI trends that can be useful in identifying future economic opportunities. The Asia Pacific Foundation of Canada is grateful for the sponsorship and support it has received from Export Development Canada and Invest Alberta for the Investment Monitor project.

Explore other reports in this series:

Investment Monitor 2022: Lagging Foreign Direct Investment in Research and Development: Past Trends, Current Relations, and Potential Collaboration Between Canada and the Asia Pacific

Investment Monitor 2022: Post-Pandemic Recovery and Canada-Asia FDI: Is the Rebound Sustainable?

Investment Monitor 2021: Report on Post-COVID Recovery and Foreign Direct Investment Between Canada and the Asia Pacific 

Investment Monitor 2020: Trade Agreements and Foreign Investment in the Asia Pacific

Investment Monitor 2019: Tracking Canada-Asia Investments at the City Level

Investment Monitor 2018: Report on Foreign Direct Investment from Canada into the Asia Pacific

Investment Monitor 2017: Report on Foreign Direct Investment from Asia Pacific into Canada